Power Engineering - VRB Power acquires Regenesys Electricity Storage Technology

27 September 2004 - VRB Power Systems Inc. has announced the completion of a transaction with RWE npower PLC whereby VRB Power will purchase an exclusive global license to the intellectual property and acquire all the related physical assets and inventory surrounding the Regenesys electricity storage technology.

"This acquisition moves VRB Power significantly forward on two fronts," states Timothy Hennessy, CEO of VRB Power. "First, some of Regenesys' key design features and intellectual property, including the most advanced, low- cost methods of manufacturing and assembly of cell stacks in the world today, will be incorporated into our own VRB Energy Storage System and cell stack development program. This will provide VRB Power with innovative cell stack manufacturing capabilities which have been through years of development utilizing industry recognized expertise and intellectual property. The benefits of this technology acquisition also extend to VRB Power's strategic relationships with NORAM Engineering and Magnetek Inc., enhancing VRB Power's ability to deliver reliable, low cost VRB Energy Storage Systems to the market."

"Secondly, there are significant synergies between the VRB and Regenesys technologies, both being flow batteries. The Regenesys technology will be easily integrated into VRB Power's current business plan and approach to the energy storage markets, and will allow VRB Power to expand into market segments for very large energy storage applications. The VRB technology is best suited for applications from 5 kW up to 10 MW (100 MW hours). With the addition of the Regenesys technology, VRB Power now has an effective range of products that can store energy from tens of kilowatt hours through hundreds of Megawatt hours providing utility scale solutions using the "Electricity Warehouse" concept developed by Regenesys" concludes Hennessy.

"We are pleased to take the progress of the past ten years and position it with a company like VRB Power which has the skill set to succeed", said David Threefold, CEO of npower Retail and former Managing Director of the Regenesys project for RWE npower.

RWE npower announced earlier this year that the ongoing funding of the Regenesys project was no longer part of its core strategy, which is to focus on electricity generation, electricity supply and renewable energy.

"Large scale electricity storage products and markets are ultimately viable and we look forward to a promising future for the technology and for the adopters of these innovative products" said Threlfall.

Details of the acquisition include an exclusive world wide license to all the Regenesys technology patents and know-how, Regenesys technology flow frame designs, state of the art assembly equipment and techniques and a significant inventory of Proton Exchange Membrane for USD $1.3 million. The license will remain exclusive for the first 5 years with provisions for extension to the exclusivity based on certain royalty payments.

VRB Power also announced that, subject to regulatory acceptance, that Regenesys Holdings Ltd. (a wholly owned subsidiary of RWE npower) will be purchasing 3,610,927 common shares of VRB Power at $.99 CAD per share for gross proceeds of $2,800,000 USD. In addition to the usual regulatory hold period of 4 months, the shares will be subject to a contractual 1 year hold period and released 25% quarterly thereafter. RWE npower will become a significant shareholder in VRB Power with a long-term interest in the future success of the Regenesys and VRB technologies.

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